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With rare exception, companies assign very little planning or resources to proactively managing the effects of a restructuring on its brand equity. While financial and legal considerations will always be the primary focus, a tangible sophistication gap has long existed between workout arrangement skills, compared with what’s required to preserve a company’s goodwill among internal and external audiences during a corporate restructuring.

Brand communication is considered a fuzzy management science by many legal and financial professionals and can be discounted by the C-suite as well. However, in our digital age, rumor and misinformation can incur permanent damage to a company’s reputation with lightning speed. A communications strategy largely consisting of press releases or cryptic statements from management falls far short of what is required to protect an enterprise’s most valuable asset — its brand.

Why Brand Equity Matters

A brand is the promise a company makes to its customers. Brands help customers understand what a company knows, what it stands for, what it will deliver and why they should trust it. Brands involve far more than a firm’s name, logo or website. Simply put, marketing is what a company does to promote its brand. Brand equity is what people believe the company is.

Marketing academics and practitioners promote plenty of convoluted definitions of brand equity. For the sake of this discussion, brand equity is best defined as the sum total of market perceptions, customer loyalty and employee engagement. If those three factors drive a company’s revenue, then building and protecting brand equity must be a strategic priority, particularly when the enterprise undergoes any change or event that may negatively influence those factors.

Brand equity has always mattered to companies. What has changed over the past decade, primarily as a result of the internet, is a company’s loss of control over information related to its brand and the democratization of influence. A company’s senior management and traditional media sources no longer have exclusive or primary control over brand equity. Anyone with Facebook, a Twitter account or a blog — including employees, customers, competitors, short sellers or dedicated troublemakers — can erode (or bolster) brand perceptions. Restructurings provide perfect opportunities for those opinions to be heard and considered.

Preparing A Game Plan

During a restructuring, it is critical that preserving a company’s brand receives the same level of attention by senior management as financial and legal considerations.

Anything short of that commitment can signal to employees, customers, business partners and other key stakeholders that their interests and concerns will take a back seat to the personal agendas of the corporate owners. Post restructuring, the rebuilding of trust and confidence with audiences that shape a company’s brand equity is far more difficult (and expensive) to achieve, because negative and incorrect facts and opinions have online visibility that can last for many years. As the classic FRAM oil filter commercial suggested: “You can pay me now…or you can pay me (much more) later.”

With an upfront commitment in place, most of the heavy lifting in creating a game plan to protect a company’s brand equity in a restructuring is front-loaded: strategic planning, delegation of responsibilities and a sense of urgency are the critical success factors.

Here are some primary considerations in preparing and implementing a game plan:

Treat Restructuring as Crisis Communication

In terms of its potential to inflict long-term damage to brand equity, a restructuring can be as significant as a product safety recall or financial fraud. Most audiences won’t understand the purpose or logistics of the transaction. Many will assume restructuring is simply a tactic to enrich senior management. The overall impression will be that the company is in trouble or going out of business. Don’t underestimate the significance of the turnaround or the sense of urgency that’s required to communicate properly with key audiences on a real-time basis.

Refine the Core Messaging

How well and how consistently the company explains what’s happening and what’s likely to occur will have the greatest impact on how audiences respond. It is critical to provide an accurate, clear and concise description of the reasons for the transition and provide insight into the company’s plans and expectations. It is critical to express empathy for those affected, especially for those who have lost their jobs. Internal pressure from legal advisors to say very little about the restructuring or to communicate in legalese often requires pushback from management.

Tailor Core Messaging for Each Audience

There is no “one size fits all” strategy when communicating a restructuring event to diverse internal and external audiences. Because employees, customers and business partners all have very different motivations and concerns, the company’s core messaging must be tailored to address the “what’s in this for me?” factors relevant to each target audience. The substance of the messaging remains the same. The tone and details will change relating to areas of greatest concern for each audience.

Select & Manage Communication Channels

Tailored communications are of little value if they are not delivered to the intended audiences through an appropriate channel. Employees, for example, will respond more positively to email, and face-to-face (or televised) meetings/town halls, than they will to statements posted on the company’s website or intranet. Communication with business partners may best be managed through personal phone calls from their company contact. Ideally, establish dedicated channels (an internal microsite, for example), and do not mix restructuring-related information with normal course business communication. In all cases, the most damaging scenarios occur when an important audience receives restructuring information from a third party or indirect source — the news media or on social media — before hearing it directly from the company.

Apply Listening Tools & Respond Immediately

Several online tools, with capabilities far beyond GoogleAlerts, can provide real-time insights into where a company is being mentioned and what’s being said. This window into market sentiment is a necessity during a restructuring, but it will be of tangible value only if a company has the capability to respond immediately and appropriately to rumors and misinformation. Keep in mind that each social media channel has its own protocol and culture and requires specific skills to communicate effectively. If a company lacks channel-specific expertise in social media, engaging outside help is essential.

Centralize All Communications

With lots of moving parts — multiple audiences, tailored communications, different online and direct channels — the potential for inconsistent messaging and inaccurate information is very high. To manage those risks, establish a very simple and strict protocol with respect to how and when transaction-related communication is managed. The game plan should include individuals covering multiple disciplines. A single individual should be responsible for implementation and keeping the team informed of progress and problems at all times.

Start & End With Employee Communication

Employees have a personal stake in the company’s future and a direct influence on customer satisfaction and loyalty. At all times, depending on how they are treated, employees can serve as strong brand ambassadors or insidious brand terrorists. Because a restructuring strategy’s success will rely, in some measure, on their cooperation and support, a communication plan should be heavily weighted in tactics designed to keep them informed and to give them a voice in the process.

Anticipate Unpleasant Surprises

Plans designed to protect brand equity during a restructuring rarely follow the script. Part of the initial planning process should include a whiteboard session to address all the possible “what if” scenarios, ranging from union problems to negative media coverage to legal or regulatory problems. It’s unrealistic and unproductive to create detailed communications strategies for all of these potential issues, but considering them in advance enables identification of their early signs and a quicker response should they occur.

Despite the negative connotations, restructuring can serve as an opportunity for a company to demonstrate its true character and to build respect and loyalty from existing and new audiences. If, as Hemingway suggested, “Courage is grace under pressure,” then a company’s behavior during a restructuring — in terms of what it says, how well it manages the process and how it backs up promises — can significantly strengthen its brand equity.

To accomplish this goal, advance planning is more critical than good intentions. A company of any size, without a deep bench of internal talent, and lacking specialized communications experience, can preserve the brand equity it has worked so hard to establish. That effort starts and ends with a commitment to transparency and an acknowledgement that brand equity is a very fragile asset.

Note: This article was published in the November / December 2017 edition of ABF Journal, found here: ABF Journal Nov/Dec 2017

In his keynote address two years ago at the Institute for Public Relations (IPR) 50th Annual Distinguished Lecture and Awards Dinner, Richard Edelman – President & CEO of the world’s largest independent public relations firm – echoed the PR profession’s long-standing goal: “…to elevate public relations as a management discipline that sits as a full partner aside finance, operations, legal, marketing and strategic leaders in the C-Suite.”

If the Edward Bernays era is considered the profession’s starting point, then public relations has had nearly a century to earn its seat at senior management’s table. But there are two major reasons – involving credentials and values – why PR still does not, and may never, sit there.

PR Lacks Credentials: Notably, the profession has no accepted body of knowledge, and lacks professional standards of practice that are supervised or enforced. Unlike law, medicine, accounting or engineering, it’s difficult to define or validate expertise in public relations – as evidenced, for example, by the volume of information and disagreement on issues as fundamental as press release protocol. Despite PRSA’s best efforts, its APR designation does not carry the same weight as MD, JD, CPA, CFA, an MBA degree, or even a Six Sigma belt.

This credentials dilemma for PR also involves the fact that other professions such as information technology, with far less than a century of corporate membership and a similar lack of credentials, have earned a prominent place at the management table.

PR Enforces Values: Ideally, public relations should function as the conscience of an organization; defining what it stands for, and working to make it accountable on that basis. Unlike any other corporate management function, the role of PR involves holding a company’s feet to the fire in terms of institutional values. Either because a particular course of action is simply the “right thing” to do (for sake of transparency, honesty or fairness), or because it may cause unwanted problems (involving morale, public opinion or legalities), it’s the job of public relations to raise its hand.

This values dilemma for PR involves the fact that many senior corporate managers who have a longstanding and secure seat at the management table and who drive most decision-making would prefer not to make their decisions with Jiminy Cricket in the same room.

Not giving PR a voice in corporate decision-making, and instead relegating its role to spinning a decided course of action or to cleaning up a related messy aftermath, appears to be the preferred approach for senior management at most corporations. At the upper end of the corporate food chain, executives whose function is listed as either Public Relations or Corporate Communications are rarely included in the Schedule 14A proxy filings as a “Named Executive Officer” by FORTUNE 500 companies. Corporate America’s NEO list clearly defines what’s meant by the “senior management table,” and the PR profession is absent by design, not oversight.

PR’s Plan to Earn a Seat at the Table

Perhaps for the first time – reflected in Richard Edelman’s stated plan to harness PR’s collective brain trust to address this issue, and the current push for inclusion of public relations in MBA school curricula – the profession appears ready to take meaningful steps to gain the corporate legitimacy it has long coveted. But these efforts will take many years to yield change, and talented PR practitioners and potential industry newcomers may consider other career paths rather than wait, thereby compounding the problem.

Regardless of size or industry, companies change direction either when they believe change will provide economic benefit, to avoid defined risks, or when they are forced to change by regulation or competitive influence. The delta between the PR function and revenue generation eliminates that rationale from consideration as a means to argue inclusion of public relations at the management table. However, both risk and regulation are strong cards PR is entitled to play in its effort to gain a seat there.

For example, to quantify the tangible value of PR, it could be beneficial for the profession to conduct research that compares the long-term stock price volatility (or beta) of public companies that include PR in its senior level decision-making process against those companies that do not. If a stock’s beta reflects market uncertainty, then a company’s track record of consistently avoiding “PR problems” as well as its ability to address those issues quickly and effectively – as a result of having a PR professional involved in operational decisions – should have a measurable effect on its stock market valuation, cost of capital and brand reputation.

Armed with objective evidence that supports the inclusion of PR as a best practice of corporate governance, the profession will have a solid platform that resonates with CXOs. Corporate America’s boards of directors may then be far more likely to require that management include PR in all strategic decisions, and issuers of Directors & Officers liability insurance might begin to factor a company’s PR discipline into pricing of its policy premiums.

To earn a seat at the management table, PR must argue its case with hard, relevant facts that will either incent or coerce companies to change. Otherwise, the keynote speaker at IPR’s 100th Distinguished Lecture and Awards Dinner in 2061 will be echoing Richard Edelman’s aspirations for the profession.

By most measures, Ray Dalio has achieved great success during his 65 years on earth. Unlike Donald Trump, Dalio didn’t inherit wealth. As a middle-class kid, he delivered newspapers, shoveled snow and was a caddy during the summer. The company Dalio established in his apartment in 1975, Bridgewater Associates, is currently the world’s largest and most successful hedge fund manager, with more than $87 billion in assets under management. Recently, Dalio was ranked by FORBES as the 30th wealthiest person in America, and the 69th wealthiest person on the planet, with a personal net worth of $15.2 billion.

So in a highly competitive landscape populated with nearly 10,000 hedge funds, how has Bridgewater been able to rise to the top of the investment management world and remain there? It’s unlikely that Dalio and his team know more about the markets, across every asset class, than all other hedge fund managers. It’s unlikely that Dalio simply has had a luckier hand in the bets he’s placed over the past 4 decades. And it’s also unlikely that Dalio has sold his soul to the devil.

In fact, Dalio makes no secret about Bridgewater’s success, and it’s articulated in great detail on his firm’s website. Dalio even provides a “Principles” playbook that you can download.

Briefly, here are 5 “secrets” to Dalio’s success:

He’s built a values-based organization – Dalio understands that Bridgewater’s ability to get 1,200 smart people to sing from the same songsheet requires clarity and consistency on what his company stands for, what it’s trying to achieve, and how it intends to get there. His belief system is based on the concept of “radical transparency,” which encourages employees to question everything, to think for themselves and to speak up.

He works ON his business, not AT his business – Dalio understands that intellectual capital, enterprise experience and operational systems & processes must be captured, documented and integrated into the day-to-day decision-making of a firm. Like Ray Kroc, Dalio has invested great thought and effort to create an organization with intrinsic value that does not rely on him, or on any individual, for its continued success. In Bridgewater, he has created the McDonald’s of investment management.

He has no patience for ego or emotion – Dalio understands how personal agendas and corporate politics can destroy any organization. He has been relentless in his efforts to remove ego barriers and emotional reactions in Bridgewater’s decision-making process. Institutional and personal transparency is the cornerstone of Bridgewater’s corporate culture. Some employees who’ve found it difficult to survive under such a high level of scrutiny either drop out or are invited to leave, providing the firm with a very effective natural selection process.

He’s focused on the importance of mistakes – Dalio understands that corporate arrogance is the most significant potential liability for successful companies. Because he believes anyone can be wrong, the Bridgewater culture views mistakes as opportunities to learn, rather than something to be avoided. FBI Director James Comey, who once served as Bridgewater’s general counsel, described the firm’s “obsession over doubt” as an asset that drives constant improvement and reduces the chances of bad decisions being made.

He’s not motivated by money – Dalio has been wealthy for a long time, but being wealthy was never his primary goal. In his own words, “I started Bridgewater from scratch, and now it’s a uniquely successful company and I am on the Forbes 400 list. But these results were never my goals—they were just residual outcomes—so my getting them can’t be indications of my success. And, quite frankly, I never found them very rewarding. What I wanted was to have an interesting, diverse life filled with lots of learning—and especially meaningful work and meaningful relationships. I feel that I have gotten these in abundance and I am happy.”

The corporate tag line describing Bridgewater Associates is aptly titled “A Different Kind of Company.” And Dalio is a different kind of American businessman. Unlike Apple’s Steve Jobs, who managed by arrogance, fiat and intimidation, Dalio has created a meritocracy that’s based on honesty, clear thinking and humility.

Bridgewater doesn’t produce clever electronic gadgets or software apps designed to entertain us or make our lives easier. Dalio’s greatest achievement is unrelated to the wealth he’s created for himself or for his institutional investor clients. Dalio’s most valuable and enduring accomplishment is based on his role as the architect of an organizational management model that can radically improve the world of work, as well as the lives of people who seek personal meaning through their work.

Unfortunately, most companies – regardless of industry – don’t have the courage or the desire to adopt Dalio’s brutally honest management approach. That’s why Bridgewater is likely to be the most world’s successful hedge fund manager for a very long time. True hedge fund craftsmanship.

Although Edward Bernays is often characterized (largely through self-promotion) as the “father of public relations,” most serious PR practitioners consider Arthur W. Page to be the first and most influential apostle of modern-day public relations and corporate communications.

From 1927 to 1946, Page served as a vice president and director at AT&T, and his many contributions to the profession are recognized today as namesake of The Arthur W. Page Center for Integrity in Public Communication – a research center at Penn State’s College of Communications – as well as the Arthur W. Page Society, whose members are corporate chief communications officers or senior officials at public relations agencies.

Page’s most lasting legacy, however, may be the seven rules of PR management, known as the Page Principles, that he espoused:

Tell the truth.Let the public know what’s happening and provide an accurate picture of the company’s character, ideals and practices.

Prove it with action. Public perception of an organization is determined 90 percent by what it does and 10 percent by what it says.

Listen to the customer.To serve the company well, understand what the public wants and needs. Keep top decision makers and other employees informed about public reaction to company products, policies and practices.

Manage for tomorrow.Anticipate public reaction and eliminate practices that create difficulties. Generate goodwill.

Conduct public relations as if the whole company depends on it.Corporate relations is a management function. No corporate strategy should be implemented without considering its impact on the public. The public relations professional is a policymaker capable of handling a wide range of corporate communications activities.

Realize a company’s true character is expressed by its people.The strongest opinions — good or bad — about a company are shaped by the words and deeds of its employees. As a result, every employee — active or retired — is involved with public relations. It is the responsibility of corporate communications to support each employee’s capability and desire to be an honest, knowledgeable ambassador to customers, friends, shareowners and public officials.

Remain calm, patient and good-humored.Lay the groundwork for public relations miracles with consistent and reasoned attention to information and contacts. This may be difficult with today’s contentious 24-hour news cycles and endless number of watchdog organizations. But when a crisis arises, remember, cool heads communicate best.

Practicing and aspiring public relations executives would be well-served to keep a copy of these timeless Page Principles on the wall, or at least in their desk’s top drawer.

Life-long students of PR craftsmanship will also enjoy and benefit from reading the acceptance remarks from the Page Society’s Hall of Fame recipients, and from watching the videos from the Page Center’s collection of oral histories given by some of the profession’s most noteworthy PR practitioners from the past and present. Notably, the Page Center’s website also contains a great number of Page’s speeches and writings.